State RegulationsAZ specificDifficulty 3/5
An insurer tells a policyholder that returning her Medicare supplement policy within the free-look window will produce only a partial refund, because coverage was in force during the period. Under A.A.C. R20-6-1101, is the insurer's position correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under A.A.C. R20-6-1101, the Medicare supplement free look is a true return right: a policyholder who returns the policy within 30 days after delivery receives a refund of premium. Deducting the value of interim coverage would convert the free look into a prorated arrangement that the rule does not authorize.
Why the other options are wrong
- A) The value of coverage in force during the window is not deductible; the rule requires a refund of premium on a timely return.
- B) No administrative-charge offset is authorized; the free look is a full return right under the rule.
- C) No annual reconciliation process exists in the rule; the refund follows directly from the timely return of the policy.
Memory hook
A free look refunds premium — it is not a rental agreement.